When To Refi

4 Replies

I came across a what I think is good deal in Chicago and I have a simple question that I do not really know the answer to:

If I purchase a property cash, how soon can I do a cash out refi?

Is it as simple as ordering an appraisal with the bank and cashing out?

Wish I could give you advice on this one but I don't know. Interested to hear the responses on this one ....

It depends on the bank, and on how much $ you want to get out. Some banks will only lend a percentage of the purchase price for the first 12 mos, but after that they will lend a percentage of a new appraised value. For others the seasoning period is shorter, like six months. Maybe some of the other Chicago area folks will have some lender suggestions for you

@Al Turner - banks have a seasoning period. Typically is it 12 months or 6 months if extensive rehab work is completed. During the seasoning period you can only get a loan on what you paid for it. Typically 75% LTV for a NOO property. The lending requirements for a refi are the same as a purchase so you will still be held to the normal credit / DTI / Reserves requirements.

Brie Schmidt, Real Estate Agent in Illinois (#471.018287) and Wisconsin (#57846-90)

Fannie Mae and Freddie both allow you to refi for your cash purchase price and accusation funds before 6 months....this is no financing on the subject property.

You can do a no cash out refi (pay off existing loans) after 4 months using a new appraisal.

You can do a cash out refi after 6 months, going off the new appraisal.

Talk to local brokers who also invest and they can find lenders that will fund these loans.